An article in the July 6, 2009 Wall street Journal, "Public Pensions Cook the Books." concerns how two public pension plans in Montana are handling their actuarial services. Doesn't apply in Canada - don't be too sure.
There was a lot of reaction to this article, largely focused on perceived overly generous public sector pension benefits. We are also seeing this type of reaction in Canada. But, one comment of a more actuarial nature grabbed my attention -
"All pension funds should be conservatively managed. They should not expect a long run return greater than the growth in GDP, or in a global economy the global equivalent. It was the outsized projections of returns that led to the underfunding. This affected private pension plans as well as public plans. Many life insurers and annuity providers made similar errant projections."
Growth in GDP has always been important in financing of social security plans, but this is the first time I've seen it tied to return assumptions for funded pension plans.